Memorandum submitted by East of England
Regional Assembly
1. INTRODUCTION
1.1 The East of England Regional Assembly
(EERA) exists to promote the economic, social and environmental
well-being of the region. It consists of a partnership of elected
representatives from the 54 local authorities in the East of England
and appointed representatives from social, economic and environmental
interests (Community Stakeholders). The full Assembly has 105
members in 2008-9 and meets approximately twice a year. In addition,
there are a number of specialist Panels that meet more frequently
to look at issues of regional strategic importance such as planning,
housing and sustainable development.
1.2 EERA welcomes this select committee
inquiry which is timely given proposals in the Review of Sub-National
Economic Development and Regeneration (SNR) which has not yet
been set out in draft legislation. As set out in EERA's response
to the "Prosperous Places" consultation, we oppose the
democratic deficit that will be created as a result of the proposed
transfer of planning, transport and (possibly) housing powers
to Regional Development Agencies (RDAs), which are unelected government
agencies.
1.3 Since 1999 EERA has worked closely with
its RDA—the East of England Development Agency (EEDA)—for
example by shaping and endorsing the latest Regional Economic
Strategy and scrutinising the Agency's activities as a critical
friend and through formal scrutiny reviews. Through this we believe
we are in a strong position to evaluate EEDA's ability to deliver
its current remit and to comment on its capacity to deliver against
the SNR proposals.
1.4 We believe that current and future challenges
for the Agency include: how to improve engagement in, and the
transparency of, its activities; how to develop its capacity regarding
spatial planning, transport and (possibly) housing; and how to
put into place adequate systems to underpin the delegation of
funding to local authorities. Our opposition to the proposals
in the SNR is therefore not only one of principle but is reinforced
by the concerns we have about RDA structure, governance and capacity
and the ability of RDAs to develop the expertise to undertake
the new operational and political roles that are proposed.
1.5 Our key comments in response to the
inquiry are as follows:
— RDA budgets are too frequently subject
to financial tinkering and "raids" by Government departments.
The cut made by BERR over the summer to EEDA's revenue budget
of £1.8 million for the remainder of this financial year,
and the subsequent announcement that RDA capital budgets are to
be further reduced by £25 million in 2009-10 and £275
million in 2010-11—with a likely cut to EEDA of £1.5
million in the first year and a reduction of some £20 million
the following year, is the most recent evidence of this. The overall
effect of all this year's cutbacks on EEDA's budget will be around
30% by the end of 2011 and the impact of this on RES delivery,
long-term economic development planning, and on partnership working,
is entirely negative.
— RDAs are presently required to deliver
too many policies, programmes and projects and this is especially
burdensome to a modestly-funded RDA such as EEDA. The Agencies
should be tasked to do fewer things, better, whilst retaining
the flexibility to invest in both economic development and economic
regeneration. The SNR proposals to extend the remit of RDAs are
therefore unhelpful.
— EEDA's budget is disproportionately
and unacceptably low given the size of the East of England and
the contribution made to national GVA.
— Outcome, rather than output, measurement,
should be used to measure RDA effectiveness and success.
— Accountability to regional and local
partners is essential if excellent RDA performance is to be achieved.
1.6 We would be pleased to contribute further
oral evidence to your inquiry if invited.
2. THE NEED
FOR A
LEVEL OF
ECONOMIC DEVELOPMENT/BUSINESS/REGENERATION
POLICY DELIVERY
BETWEEN CENTRAL
AND LOCAL
GOVERNMENT
2.1 Central and local government have a
critical role to play in providing the strong and stable foundations
for a thriving economy which underpins healthy, cohesive communities.
Whether RDAs alone could be the most effective way of adding value
at the regional level is less clear. For example, EERA's Planning
and Housing Panels have proven that partners in the East of England
do come together to identify key priorities for their region.
Although EEDA plays a significant roles in these, so do a wide
range of other local and regional bodies led by EERA.
2.2 EERA believes that regional and sub-regional
policy development and delivery is necessary but only where there
are cross-boundary issues to be tackled, or where local and/or
national interventions alone would not be sufficient to address
the issue. For example, the Regional Partnership Group in the
East of England (of which EERA is a member) has an agreed position
on the delivery of some economic development roles with business
support best delivered at the regional level, largely through
Business Link East and consistent with the Business Support Simplification
Programme.
2.3 Conversely, the assessment of local
economies and priority-setting will be achieved best by local
authorities, possibly acting in partnership to cover functional
economic areas. This is consistent with the duty to undertake
an economic assessment, as recommended in the SNR.
2.4 Local authorities and partners in the
private and voluntary and community sectors have experience in
addressing economic development issues. There should, therefore,
be a strong expectation that in future RDA responsibilities and
resources should be delegated to the most local level possible.
EERA is leading a project on behalf of the regional improvement
and efficiency partnership—Improvement East—to identify
what support is required to improve local authorities' economic
development capacity in preparation for proposed SNR responsibilities,
and how this might be delivered.
3. THE EFFECTIVENESS
OF RDAS
AND THEIR
ROLE IN
ADDING VALUE
3.1 In our experience and based on the evidence
of others, for example the relatively recent NAO IPA report, the
effectiveness of EEDA and the value it adds varies according to
the issue in question. Furthermore each region faces different
economic challenges, rightly meaning that each RDA is different
and as EEDA is the lowest-funded RDA it relies more on partnership
approaches to deliver its targets and outcomes.
3.2 RDAs generally can add value by contributing
their specific economic policy expertise to wider strategy planning
and delivery both at the regional and sub-regional level. EEDA
has successfully brought the region's economic challenges into
focus and led the development of dedicated regional economic ambitions
and strategies. Nevertheless, the East of England has yet to achieve
the aspiration articulated in the second RES to establish itself
as one of the 20 strongest regional economies in Europe.
3.3 Furthermore, the English Regions' Network
(ERN) has found through its scrutiny inquiries that perceptions
of the RDAs tend to be influenced significantly by the quality
of the individual members of RDA staff encountered and the expertise
and skills they bring. Performance within RDAs tends to vary by
directorate and team. To some extent this is borne out by inquiries
in the East of England and not surprisingly there is concern about
the consistency as well as capacity of the RDAs.
3.4 In determining added value, it is important
to take account of the RDAs' opportunity cost—how could
the RDAs annual £2.3bn "single-pot" budget be most
usefully deployed and is the "pay back" currently as
good as it should be? It is useful to note that local authorities
still have no statutory role regarding economic development and
regeneration beyond promoting their locality's economic, environmental
and social wellbeing. It is not surprising therefore that many
local authorities have traditionally focused on the legislative
aspects of economic development such as planning, over other aspects
such as adult skills. Local authorities have also led the development
of mature and effective local partnership arrangements since the
establishment of RDAs in 1999 and currently lead, through LSPs,
on the delivery of LAAs. However the effectiveness of these partnership
structures, including in terms of engagement with the private
sector, is sometimes compromised because of other, and occasionally
duplicative, structures such as LDVs and sub-regional economic
partnerships whose proliferation over recent years, often supported
by the RDAs, has led to a cluttered sub-regional landscape. EERA
suggests that more of the RDAs' budget could be used more effectively
by local authorities to produce a more effective, more transparent
and simpler structure. 4. RDA expertise
4.1 EEDA has extensive expertise in analysing
and understanding quantitative data on the regional economy and
using this to develop regional economic strategies and plans;
the Agency has also led on the establishment of the newly-launched
Regional Intelligence Centre. Possible SNR legislation is likely
to require county and unitary local authorities to undertake sophisticated
local economic assessments so in the East of England, partners
have come together to agree a standardised protocol for local
authorities' economic assessments that can directly and easily
contribute to the single regional strategy. These processes must
complement each other and avoid duplication of effort.
4.2 EEDA has also developed a relatively
large complement of programme and project managers to oversee
the delivery of a range of economic development interventions
to support the RES. Arguably, a number of these interventions
could be delivered and managed better through local authorities
or voluntary and community organisations. EEDA could also usefully
review the balance between (a) its external relations and communications
functions and (b) its delivery capacity, with a view to ensuring
that the maximum resource possible is concentrated on implementing
the frontline economic development interventions set out in the
RES and EEDA's Corporate Plan.
4.3 To support and link the complex sub-regional
and local partnership arrangements, EEDA has had to invest significant
resources to develop expertise and capacity in managing these
relationships. If simpler, more effective partnership arrangements
were used, there would be far less of a need to coordinate them,
again offering further opportunities for increased investment
in frontline delivery capacity.
5. THE EXTENT
OF, AND
NEED FOR,
THEIR OVERSEAS
ACTIVITIES
5.1 EEDA has recognised the significance
of globalisation in leading the preparation of the current RES
and likewise has acknowledged that sustainable economic development
takes place at the regional level with specific challenges and
opportunities but within an EU context with associated funding
opportunities.
5.2 The Agency has therefore produced an
International Strategy and has in the past supported regional
presences and initiatives in, amongst others, China, the USA and
Brussels. EEDA continues to contribute to an East of England Partnership
Brussels Office managed by EERA on behalf of the region's local
authorities, EEDA, GO-East and a number of other private and public
sector partners. EERA welcomes the outward-facing work of EEDA
and especially the support the Agency gives to the Brussels Office,
which has a key role in providing intelligence to, and lobbying
on behalf of, regional partners and in securing funding from the
EU to meet priorities that are specific to the East of England.
6. THE CONSEQUENCES
OF EXPANDING
RDA REMIT TO
INCLUDE NEW
FUNCTIONS, AS
PROPOSED BY
THE SUB-NATIONAL
REVIEW, INCLUDING
THE DELIVERY
OF EU FUNDING
6.1 EERA restates its principled opposition
to the SNR recommendation that RDAs—unelected government
agencies—should be given responsibility for regional planning
and a leading role in place shaping. The makers of planning policy
should continue to be accountable to the public through the ballot
box. Further, we are concerned that RDAs are not currently well
placed to perform their proposed new functions. These issues could
have significant consequences:
(i) A democratic deficit: RDAs have no democratic
mandate. EERA believes that planning must be subject to local
democratic accountability; the proposal to move regional planning
responsibilities to RDAs marginalises democratically elected councillors
in key planning decisions. This therefore threatens democratic
ownership and the legitimacy of the new single regional strategy.
(ii) A single strategy with no regional ownership:
Local authorities will be unwilling to endorse and support a single
regional strategy they had minimal involvement in developing,
thus threatening its delivery. Similarly, in setting out the RDAs'
new remit, there is little consideration of their duty to engage
stakeholders. As members of Regional Assemblies community stakeholders
representing environmental, economic and social concerns have
had a considerable role to play in ensuring wider community engagement
with, and ownership of, regional strategies. However, the SNR
weakens their formal role in the development of a single strategy,
thus diminishing expert input and regional buy-in.
(iii) An unsustainable single regional strategy:
There is considerable risk that a single regional strategy prepared
by an organisation with a single overarching goal of economic
growth will fail to meet the principles of sustainable development.
These concerns are not allayed by the SNR consultation, which
lacked consideration of wider sustainable development objectives.
The new single regional strategies must be firmly grounded in
the integration of the three pillars of economic, social and environmental
sustainability; this should be a statutory duty for RPBs. To achieve
a shift in focus to sustainable development requires a significant
shift in the priorities of RDA Boards and Department of Business,
Enterprise and Regulatory Reform (BERR) officials and ministers.
(iv) A skills shortage for preparation and delivery
of a single regional strategy: EERA strongly endorses the integration
of regional economic policy into the wider spatial framework,
currently provided by Regional Spatial Strategies. However RDAs
are not well placed to develop the single regional strategy and
whilst some may be beginning to pick up the challenge of change,
there is considerable scepticism that they will develop sufficiently
and in time to adequately fulfil the RPB role:
— They have limited experience of brokering
statutory solutions across different political groups, geographical
locations and constituencies of interest. The SNR seems to under-estimate
the complexity of achieving democratic regional ownership of the
single regional strategy; this requires a range of experience
and skills not currently sufficiently available within RDAs. On
the other hand, there is a real danger that were they to successfully
adapt to be fit for purpose post SNR, then the "fleetness
of foot", and strong economic focus for which RDAs were established,
could be lost.
— Currently RDAs do not contain staff
with sufficient experience of preparing and delivering regional
planning policy; there is significant concern that the expertise
within Regional Assemblies may be lost as a result of the current
uncertainty arising from SNR and the long transition to any transfer
of responsibilities.
— A range of related functions is also
conducted by RPBs, such as monitoring and conformity; the skills
for this work are not currently available within RDAs.
(v) Inadequate resources: It is unclear how RDAs
will be resourced to carry out their proposed additional functions,
which must be properly resourced if they are to be delivered effectively.
If additional funding is not provided, there is a risk that RDAs
will have to divert funds from their economic development duties
(where budgets are already declining) to deliver RPB functions,
thus risking their ability to meet economic development challenges
in their regions.
(vi) Confused Government ownership: Whilst BERR
remains the sponsoring department for RDAs, the considerable complexities
of the planning system, and the role of the RPB, will require
substantial guidance from Communities and Local Government. If
this issue of ownership and leadership is not resolved, we fear
there will be different expectations of the single regional strategy
from the two government departments (CLG and BERR) and resultant
difficulties in developing and delivering the strategy.
7. THE ACCOUNTABILITY
OF RDAS
7.1 It is critical that EEDA is accountable
to the region, not just to central government, with EERA or, post
SNR, a successor consortium of local authorities, responsible
for regional scrutiny. Good work has been carried out by the Regional
Assemblies with different approaches adopted according to the
circumstances in each region. However Regional Assemblies are
concerned that the impact of scrutiny activities has been restricted
by the limitations of the RDA Act (1988). Whatever scrutiny and
accountability arrangements are established within the regions
as a result of the SNR, future activities should be enhanced with
stronger powers for local authorities and other partners to hold
the RDA to account for the development and delivery of the single
regional strategy. Current local authority powers which require
RDAs (and other public bodies) to provide them with information
are inadequate to enable effective scrutiny.
7.2 The Regional Assemblies, using their
considerable experience in conducting regional scrutiny, have
identified a range of principles that are essential to effective
regional scrutiny and that are endorsed by EERA. Therefore, in
addition to requiring a strong statutory basis to activities,
whatever arrangements go forward for regional scrutiny must be:
— Informed by specialist expertise.
— Clear in its purpose, understood
and valued.
— Constructive and focused on clear
outcomes.
— Objective, rigorous and honest.
7.3 Strong regional accountability is particularly
important given RDAs' proposed expanded remit. The contested nature
of regional planning policy means communities will demand far
stronger democratic accountability of RDAs than is currently the
case. Whilst existing mechanisms and recent proposals (such as
parliamentary regional select committees) may increase accountability
to Government there is a fundamental, and more significant, accountability
gap within the regions. "Oversight" by local authorities
at the end of the process—as opposed to them developing
as an equal partner and "signing off" the single regional
strategy—is not regarded by EERA as a sufficient substitute
for a truly democratic process jointly-led by local authorities
with their RDAs and engaging community stakeholders and other
partners.
7.4 Should RDAs assume responsibility for
leading the development of the single regional strategy and regional
planning, this must be preceded by a significant overhaul of the
governance arrangements of RDAs. Whilst EERA welcomes the input
of businesspeople and other stakeholders in directing the region's
economic development, the new competencies of RDAs would be better
overseen by a Board comprising a greater proportion of local authority
members from the region than is currently the case.
7.5 Whilst accountability to localities
and the region needs to be strengthened, we recognise that RDAs
are subject to numerous strands of scrutiny and performance management.
Nevertheless, the number of processes has not led to a tangible
increase in accountability to the regions. Many of the central
government scrutiny processes for RDAs fail to operate in a transparent
manner and are irrelevant to regional partners and local communities.
It is unclear to what extent these activities take into account
the experience and views of partners and communities. The activities
often appear to operate in isolation, with little clarity on the
value each adds to the overall accountability of RDAs. Whilst
RDAs should be subject to rigorous scrutiny, the current proliferation
of approaches is failing to achieve coordinated and coherent accountability
and is disproportionate. 7.6 Regarding proposals for Parliamentary
regional select committees, we reiterate our view that such committees
should reflect regional political balance and should engage local
authority leaders. They should also avoid becoming solely preoccupied
with the RDA, which we believe should be a matter for regionally-led
scrutiny, and central performance management systems, and should
rather look at how well or not Government departments are delivering
in the regions.
8. HOW RDA PERFORMANCE
HAS BEEN
MEASURED IN
THE PAST
AND WILL
BE MEASURED
IN FUTURE
8.1 Firstly, it is important to note that
monitoring outputs—such as jobs created—is not a sufficiently
rigorous process to ensure RDA accountability to the region or
to identify the outcomes of their work. Performance management
is one element contributing to accountability, but they are not
one and the same. It is regrettable, then, that the SNR indicates
that RDAs will in future be held to account through a central
government performance framework. This continues Government's
focus on top-down performance measurement rather than accountability
to regions and localities. Nevertheless EERA is pleased that in
its latest Corporate Plan, EEDA uses a logic chain process to
explain how its planned activities will affect regional outcomes
although more time is required to properly evaluate this tool.
8.2 An ongoing concern for all Regional
Assemblies has been the government's focus on economic performance
measures for RDAs which if not adjusted post SNR could imply a
disregard for the social and environmental impacts of economic
growth. Noting our opposition to such a transfer, if RDAs are
to take responsibility for planning, transport and possibly housing
it is entirely inappropriate for economic development to take
primacy over the other elements of sustainable development. Economic
growth is inextricably linked with social and environmental issues
and directing economic growth at the expense of society and the
environment will not allow for sustainable development in the
long-term.
8.3 Whilst the national criteria for RDA
performance outputs allows for a degree of regionally-specific
indicators, it is not clear how effectively this flexibility is
being used. RDAs must ensure that it is used to best effect.
8.4 One particular element of monitoring
of RDAs that EERA wishes to question is the Independent Performance
Assessment. There were varied experiences in different regions
regarding the extent to which partners, including the Regional
Assemblies, were engaged in the process. Fuller and more consistent
engagement of Assemblies, local authorities and other community
stakeholders should be guaranteed in future, although currently
it is unclear whether an evaluation of this process has been made
and if so whether the process is set to continue.
8.5 As set out in section 6, clarity is
needed on where overall responsibility for RDA performance management
lies. It is not yet clear how BERR and CLG will manage their respective
responsibilities for monitoring delivery and neither is it clear
what additional monitoring burden is likely to be placed on RDAs.
12 September 2008
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